A short sale is contingent upon the lender’s approval of the agreement to except less than the balance owed on the mortgage loan, so the short sale addendum will clarify this in paragraph A. This short sale addendum will also set forth the timeframe that they will wait for the lender’s approval, and you’ll see a blank line for this. There isn’t a way to gauge an exact date that the lender would give the approval, so this is why the blank line is there.
Short sale approvals, can generally take anywhere from one to four months, and it really just depends. The lender may ask for the seller to make a contribution, and if this is the case, then the seller isn’t obligation to sign the short sale addendum. So, beware! You should certainly never do something that you aren’t comfortable with.
The second portion of this short sale addendum appears in paragraph B, which gives two options regarding the buyer’s earnest money. You can either opt to release the earnest money deposit to upon the seller’s acceptance, or you can request to hold it until there is a short sale approval. This is usually suggested only because with a short sale, you can’t guarantee the time frame. Again, you should never do something that you aren’t comfortable with. However, without the release of the earnest money deposit, it might make it too easy for the buyer to walk away during the process. So, this is a tough call.
In addition, the short sale addendum also gives options concerning getting some other necessary things taken care of. The inspection and any other contingencies can begin upon acceptance of an offer, or they can begin upon the short sale approval. The part that gives much uncertainty is paragraph C, which basically states that there is no guarantee that the bank is going to approve the short sale.
The best thing to do when you aren’t sure is to get the correct professional involved. You need a Certified Distressed Property Expert to help guide you through the process. For more information on whom you can trust, and what you need to get this done, please visit, www.inlandempireshortsaleresource.com. Help is only one click away.